annual report 2011-2012 · 2019. 12. 6. · ms norma jeffery, trustee (until 21 november 2011) the...

ANNUAL REPORT 2011-2012

STATEMENT OF COMPLIANCE

Public Education Endowment Trust (PEET) Annual Report for 2011-2012 2

For year ended 30 June 2012

HON PETER COLLIER MINISTER FOR EDUCATION In accordance with Section 63 of the Financial Management Act 2006, I hereby submit for your

information and presentation to Parliament, the Annual Report of the Public Education

Endowment Trust for the year ended 30 June 2012.

The Annual Report has been prepared in accordance with the provisions of the Financial

Management Act 2006 and Section 14 of the Public Education Endowment Act 1909-81.

Professor Lesley Parker AM Professor Keith Punch

Chairperson Trustee

Public Education Endowment Trust Public Education Endowment Trust

17 September 2012

Contact Details

Postal Electronic

Public Education Endowment Trust Internet: www.peet.wa.gov.au

PO Box 1766 Email: [email protected]

OSBORNE PARK WA 6916 Telephone: 08 9441 1900

Facsimile: 08 9441 1901

CONTENTS


PEET AT A GLANCE.................................................................................................................... 4

Operational Structure ............................................................................................................. 4

Performance Management Framework .................................................................................. 7

REPORT ON OPERATIONS......................................................................................................... 8

Agency Performance ............................................................................................................. 8

Financial Targets ................................................................................................................. 10

SIGNIFICANT ISSUES AND TRENDS ....................................................................................... 11

DISCLOSURES AND LEGAL COMPLIANCE ............................................................................ 12

Auditor General’s Opinion .................................................................................................... 12

Financial Statements ........................................................................................................... 15

Statement of Comprehensive Income .................................................................................. 16

Statement of Financial Position ........................................................................................... 17

Statement of Changes in Equity .......................................................................................... 18

Statement of Cash Flows ..................................................................................................... 19

Notes to the Financial Statements ....................................................................................... 20

Key Performance Indicators ................................................................................................. 39

Other Financial Disclosures ................................................................................................. 43

Governance Disclosures ...................................................................................................... 44

Other Legal Requirements ................................................................................................... 45

Annual Estimates ................................................................................................................. 46


PEET AT A GLANCE

Operational Structure

Enabling Legislation

The Act governing the Trust in Western Australia is the Public Education Endowment Act 1909

(WA).

Under section 9 of this Act, the Trustees may disburse money derived as income of real and

personal property and investments towards the improvement of such property, and the payment

of salaries and other expenditure in carrying out the provisions of the Act, relating to public

education, in force for the time being.

Responsible Minister

The Hon Peter Collier MLC, Minister for Education

Mission

To support educational initiatives that will lead to long-term benefits for Western Australian school

students.

Objectives and Functions

The role of the Trust is to maintain investment funds in order to finance specific educational

projects that are presented to the Trustees from time to time. The Trustees grant funding for

educational projects that benefit as many Western Australian students as possible.

The Trust generates revenue from interest on investments and sale of land.

The Trustees meet periodically to deal with administration, finance and other matters affecting

Trust land.

PEET AT A GLANCE


Administrative Structure

The Trust membership, in accordance with the provisions of Section 2 of the Public Education

Endowment Act 1909-81, consists of two ex-officio members, the Hon Minister for Education and

the Director General of Education, and three other Trustees appointed for a term of three years

by His Excellency the Governor.

The membership of the Trust for the reporting period comprised:

Hon Peter Collier, Minister for Education (from 29 June 2012)

Hon Dr Elizabeth Constable, Minister for Education (until 29 June 2012)

Ms Sharyn O’Neill, Director General, Department of Education

Professor Lesley Parker, Trustee (from 1 November 2011)

Professor Keith Punch, Trustee (from 21 November 2009)

Ms Norma Jeffery, Trustee (until 21 November 2011)

The Hon Dr Elizabeth Constable was Chair of the Trust until 2 May 2012 when Professor Lesley

Parker assumed this responsibility.

The Trustees met on the following four occasions to consider Trust business:

5 August 2011

28 November 2011

8 February 2012

2 May 2012

Executive support was provided to the Trust by the Department of Education until 31 March 2012.

Since 1 April 2012, the Department of Education Services has provided this support to the Trust.

Legislation Impacting on the Trust’s Activities

In performance of its functions, the Public Education Endowment Trust complies with the

following relevant written laws:

Auditor General Act 2006

Contaminated Sites Act 2003

Disability Services Act 1993

Electoral Act 1907

Equal Opportunity Act 1984

Financial Management Act 2006

Freedom of Information Act 1992

Industrial Relations Act 1979

Minimum Conditions of Employment Act 1993

Occupational Safety and Health Act 1984

Public Sector Management Act 1994

Salaries and Allowances Act 1975

State Records Act 2000

State Supply Commission Act 1991

PEET AT A GLANCE


In the financial administration of the Public Education Endowment Trust, we have complied with

the requirements of the Financial Management Act 2006 and every other relevant written law, and

exercised controls which provide reasonable assurance that the receipt and expenditure of

monies and the acquisition and disposal of public property and incurring of liabilities have been in

accordance with legislative provisions.

At the date of signing, we are not aware of any circumstances, which would render the particulars

included in this statement misleading or inaccurate.

PEET AT A GLANCE


Performance Management Framework

Outcome Based Management Structure

The Trust’s performance management framework was established in 2010-11. The Outcome

Based Management (OBM) structure was developed in conjunction with the Department of

Treasury and the Office of the Auditor General.

Government Goal Agency Level Government

Desired Outcome

Service

Outcomes Based Service

Delivery: Greater focus on

achieving results in key service

delivery areas for the benefit of

all Western Australians.

Enhancement of the public

education of Western Australian

students.

Grants – providing grants for

public education purposes, for

projects that will benefit the

education of Western

Australian students.

The Trust’s key effectiveness indicators provide information on the extent to which the outcome

has been achieved through the delivery of the agreed service. The Trust’s efficiency indicator

demonstrates the efficiency with which the Trust delivers the agreed service.

Performance against key effectiveness and efficiency indicators is detailed in the ‘Disclosures and

Legal Compliance’ section on page 40.

Shared Responsibility with other Agencies

The Trust did not share any responsibilities with other agencies in 2011-12.


REPORT ON OPERATIONS

Agency Performance

Trust Income

Leasing of Trust Land

The Trust did not receive any income from the Fremantle land for the period ending 30 June

2012. The lessee vacated the property on 28 February 2006.

Investment of Trust Funds

The Trust has one account at the Commonwealth Bank of Australia (CBA), which combines the

Trust’s Investment and Operating accounts.

Funds held within the CBA account are invested by the Department of Treasury through the

Western Australian Treasury Corporation and earned an interest return of $570,413 for the period

ending 30 June 2012.

Utilisation of Trust Finance

Expenditure was authorised during the financial year to fund the assessment of education

projects and administration expenses.

Projects/Grants

In 2011 the Trust initiated a new grants strategy based on funding research for the benefit of

schooling education in Western Australia. The Trust approved six grants to various Universities

for research projects. The contracts for this funding are currently being negotiated.

Land Holdings

Metropolitan Land

Freehold land vested in the Trust as at 30 June 2012 totals 3.0152 hectares and has a fair value

of $7,950,000. This land can be described as FREMANTLE - Reserve No.11384; Lots 1186-

1192, 1197-1200, 1207-1208, 1213-1215, and 1725. BP Australia Ltd leased this property until

28 February 2006. The land is currently unoccupied.



Internal Audit

The scope of the audit conducted by Braxford Consultancy Pty Ltd was to ensure that the service

delivery:

Satisfied the responsibilities of the Accountable Officer as defined in the Financial

Management Act 2006.

Satisfied the requirements of the Treasurer’s Instruction 1203.

Included an effective audit of systems relating to information processing.

Provided a value for money approach that incorporates best practice.

Identified the risks inherent in the operation of the Public Education Endowment Trust.

The internal audit for the 2011-12 financial year has been completed.

Management/Development of Trust Land

LandCorp has been commissioned by the Trust to advise the Trustees on all matters affecting

Public Education Endowment land.



Financial Targets

Actual Results versus Budget Targets

Financial Targets 2011-12

Target(1)

$

2011-12

Actual

$

Variation(2)

$

Total cost of services 626,779 749,265 (122,486)(a)

Net cost of services 48,265 (178,852) (227,117)(b)

Total equity 20,443,955 20,231,049 (212,906)(c)

Net increase / (decrease) in cash held (81,307) 502,743 584,050(d)

Approved full time equivalent (FTE) staff level 1 1 -

1. As specified in the Budget Statements.

2. Further explanations are contained in Note 21 ‘Explanatory statement’ to the financial statements.

a. The variation is mainly due to expected grants payments of $500,000 not occurring, which were offset by an

unexpected loss on fair valuation adjustment of $650,000 in relation to investment property. The write down of

the land value in Fremantle was in accordance with a valuation undertaken by Landgate.

b. In addition to the explanation above regarding expenses, the variation was also due to an increase in interest

revenue of $67,369 as a result of higher than expected interest rates.

c. The variation is mainly due to expected grant payments of $500,000 not occurring, offset by the fair valuation

adjustment of $650,000.

d. The variation is mainly due to less than expected grants payments of $500,000 not occurring and increased

interest received of $37,690.


SIGNIFICANT ISSUES AND TRENDS

Significant Issues and Trends

The Public Education Endowment Trust’s vision for 2011-2015 is to fund projects relevant to the

current needs of Western Australian school students, teachers, schools and their communities.

In January 2011 the Trust agreed to a new evidence based research focus for the grants program

that will provide the greatest benefit to the greatest number of students.

The following research areas have been identified as the main focus. They centre on achieving

results in education delivery and are prioritised areas in need of further investigation.

effective early childhood education strategies

improving student achievement in low socio economic communities

improving students’ attendance

strategies to engage and motivate boys in education

effective strategies to improve student behaviour

indigenous education

effective online technologies


DISCLOSURES AND LEGAL COMPLIANCE

Auditor General’s Opinion



Financial Statements

Certification of Financial Statements

For the year ended 30 June 2012

The accompanying financial statements of the Public Education Endowment Trust have been

prepared in compliance with the provisions of the Financial Management Act 2006 from proper

accounts and records to present fairly the financial transactions for the financial year ending

30 June 2012 and the financial position as at 30 June 2012.

At the date of signing we are not aware of any circumstances, which would render any particulars

included in the financial statements misleading or inaccurate.

Raymond Willis Professor Keith Punch

Chief Finance Officer Trustee


Professor Lesley Parker AM

Chairperson

Public Education Endowment Trust

17 September 2012



Statement of Comprehensive Income


Note 2012 2011

$ $

COST OF SERVICES

Expenses

Supplies and Services 4 40,402 42,313

Employee Expenses 5 58,710 29,209

Accommodation Expenses 6 - 2,516

Net Loss on Fair Value Adjustment of Investment Property 7 650,000 -

Other Expenses 8 153 145

Total Cost of Services 749,265 74,183

Income

Revenue

Interest Revenue 9 570,413 578,456

Net Gain on Fair Value Adjustment of Investment Property 10 - 394,095

Total Revenue 570,413 972,551

NET COST OF SERVICES (178,852) 898,368

Income from State Government 11

Resources received free of charge 10,211 6,664

Total Income from State Government 10,211 6,664

SURPLUS/(DEFICIT) FOR THE PERIOD (168,641) 905,032

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (168,641) 905,032

The Statement of Comprehensive Income should be read in conjunction with the accompanying notes



Statement of Financial Position

As at 30 June 2012

Note 2012 2011

$ $

ASSETS

Current Assets

Cash and Cash Equivalents 18 12,169,085 11,666,342

Receivables 12 129,678 146,956

Other Current Assets 13 3,684 6,985

Total Current Assets 12,302,447 11,820,283

Non-Current Assets

Investment Property 14 7,950,000 8,600,000

Total Non-Current Assets 7,950,000 8,600,000

TOTAL ASSETS 20,252,447 20,420,283

LIABILITIES

Current Liabilities

Payables 16 21,398 20,593

Total Current Liabilities 21,398 20,593

TOTAL LIABILITIES 21,398 20,593

NET ASSETS 20,231,049 20,399,690

EQUITY 17

Contributed Equity 5,388,902 5,388,902

Reserves 5,724,500 5,724,500

Accumulated Surplus 9,117,647 9,286,288

TOTAL EQUITY 20,231,049 20,399,690

The Statement of Financial Position should be read in conjunction with the accompanying notes.



Statement of Changes in Equity


The Statement of Changes in Equity should be read in conjunction with the accompanying notes

The 2011 figures have been restated. The 1 July 2010 balance was not affected by the error. The $15,000 error was due to an accrual

for outstanding project expenses (grants) that were conditional. The grant conditions were not met and the grant was not payable,

requiring a reversal of the accrual against equity in 2011.

Note

Contributed

equity Reserves

Accumulated

surplus/

(deficit) Total equity

$ $ $ $

Balance at 1 July 2010 17 5,388,902 5,724,500 8,381,256 19,494,658

Total comprehensive income for the period - - 905,032 905,032

Balance at 30 June 2011 5,388,902 5,724,500 9,286,288 20,399,690

Balance at 1 July 2011 5,388,902 5,724,500 9,286,288 20,399,690

Surplus/(Deficit) - - (168,641) (168,641)

Other comprehensive income - - - -

Balance at 30 June 2012 5,388,902 5,724,500 9,117,647 20,231,049



Statement of Cash Flows


Note 2012 2011

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Payments

Administration (7,821) (17,537)

Employee benefits (58,946) (45,541)

Supplies and services (19,608) (34,123)

Project expenses - (11,500)

GST payments on purchases (8,188) (9,707)

Receipts

Interest received 587,690 558,412

GST receipts from taxation authority 9,616 8,054

Net cash provided by/(used in) operating activities 18 502,743 448,058

CASH FLOWS FROM INVESTING ACTIVITIES

Payments

Expense payments from sale of non-current physical assets - -

Receipts

Proceeds from sale of non-current physical assets - -

Net cash provided by/(used in) investing activities - -

Net increase/(decrease) in cash and cash equivalents 502,743 448,058

Cash and cash equivalents at the beginning of period 11,666,342 11,218,284

CASH AND CASH EQUIVALENT ASSETS AT THE END OF PERIOD 18 12,169,085 11,666,342

The Cash Flow Statement should be read in conjunction with the accompanying notes



Notes to the Financial Statements


Note 1. Australian Accounting Standards

General

The Public Education Endowment Trust’s financial statements for the year ended 30 June 2012 have been prepared in

accordance with Australian Accounting Standards. The term ‘Australian Accounting Standards’ refers to Standards and

Interpretations issued by the Australian Accounting Standards Board (AASB).

The Trust has adopted any applicable new and revised Australian Accounting Standards from their operative dates.

Early adoption of standards

The Trust cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of

Australian Accounting Standards and Other Pronouncements. There has been no early adoption of Australian

Accounting Standards that have been issued or amended (but not operative) by the Trust for the annual reporting

period ended 30 June 2012.

Note 2. Summary of Significant Accounting Policies

(a) General statement

The Trust is a not for-profit reporting entity that prepares general purpose financial statements in accordance with

Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative

pronouncements of the AASB as applied by the Treasurer's instructions. Several of these are modified by the

Treasurer's instructions to vary application, disclosure, format and wording.

The Financial Management Act and the Treasurer's instructions impose legislative provisions that govern the

preparation of financial statements and take precedence over Australian Accounting Standards, the Framework,

Statements of Accounting Concepts and other authoritative pronouncements of the AASB.

Where modification is required and has had a material or significant financial effect upon the reported results, details of

that modification and the resulting financial effect are disclosed in the notes to the financial statements.

(b) Basis of preparation

The financial statements have been prepared on the accrual basis of accounting using the historical cost convention,

except for land and buildings which have been measured at fair value.

The accounting policies adopted in the preparation of the financial statements have been consistently applied

throughout all periods presented unless otherwise stated.

The financial statements are presented in Australian dollars and are all rounded to the nearest dollar ($).

(c) Reporting entity

The reporting entity comprises of Trust. There are no related bodies.



(d) Income

Revenue recognition

Revenue is measured at the fair value of consideration received or receivable. Revenue is recognised for the major

business activities as follows:

Interest

Revenue is recognised as the interest accrues.

Grants, donations, gifts and other non-reciprocal contributions

Revenue is recognised at fair value when the Trust obtains control over the assets comprising the contributions, usually

when cash is received.

Other non-reciprocal contributions that are not contributions by owners are recognised at their fair value. Contributions

of services are only recognised when a fair value can be reliably determined and the services would be purchased if not

donated.

(e) Investment Property

Investment property, principally comprising freehold land, is held for long term rental yields and is not occupied by the

Trust. Investment property is carried at fair value, as mandated by TI 954, representing open market value determined

annually by external valuers. Changes in fair value are recorded as a Net Loss on Fair Value Adjustment of Investment

Property or a Net Gain on Fair Value Adjustment of Investment Property.

(f) Impairment of assets

Property and plant and equipment are tested for any indication of impairment at the end of each reporting period.

Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is

less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an

impairment loss is recognised. As the Trust is a not for profit entity, unless an asset has been identified as a surplus

asset, the recoverable amount is the higher of an asset’s fair value less costs to sell and depreciated replacement cost.

The risk of impairment is generally limited to circumstances where an asset’s depreciation is materially understated,

where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets

is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or

expiration of asset’s future economic benefits and to evaluate any impairment risk from falling replacement costs.

The recoverable amount of assets identified as surplus assets is the higher of fair value less costs to sell and the

present value of future cash flows expected to be derived from the asset. Surplus assets carried at fair value have no

risk of material impairment where fair value is determined by reference to market-based evidence. Where fair value is

determined by reference to depreciated replacement cost, surplus assets are at risk of impairment and the recoverable

amount is measured. Surplus assets at cost are tested for indications of impairment at the end of each reporting

period.

(g) Leases – Accommodation expense

Operating leases are expensed on a straight line basis over the lease term as this represents the pattern of benefits

derived from the leased accommodation.



(h) Financial Instruments

In addition to cash the Trust has two categories of financial instrument:

- Receivables; and

- Financial liabilities measured at amortised cost.

Financial instruments have been disaggregated into the following classes:

- Financial Assets

• Cash and cash equivalents

• Receivables

- Financial Liabilities

• Payables

Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction

cost or the face value.

The fair value of short-term receivables and payables is the transaction cost or the face value because there is no

interest rate applicable and subsequent measurement is not required as the effect of discounting is not material.

(i) Cash and cash equivalents

For the purpose of the Statement of Cash Flows, cash and cash equivalent (and restricted cash and cash equivalent)

assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily

convertible to a known amount of cash and which are subject to insignificant risk of changes in value.

(j) Receivables

Receivables are recognised at original invoice amount less an allowance for any uncollectible amounts (i.e.

impairment). The collectability of receivables is reviewed on an ongoing basis and any receivables identified as

uncollectible are written off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is

raised when there is objective evidence that the Trust will not be able to collect the debts. The carrying amount is

equivalent to fair value as it is due for settlement within 30 days.

(k) Payables

Payables are recognised at the amounts payable when the Trust becomes obliged to make future payments as a result

of a purchase of assets or services. The carrying amount is equivalent to fair value, as they are generally settled within

30 days.

(l) Resources received free of charge or for nominal value

Resources received free of charge or for nominal cost that can be readily measured are recognised as income at fair

value.

Assets or services are received from other State Government agencies are separately disclosed under Income from

State Government in the Statement of Comprehensive Income.

(m) Comparative figures

Comparative figures are, where appropriate, reclassified to be comparable with the figures presented in the current

financial year.



Note 3. Disclosure of Changes in Accounting Policy and Estimates

Initial application of an Australian Accounting Standard

The Trust has not applied any new Australian Accounting Standards effective for annual reporting periods beginning on

or after 1 July 2011.

Future impact of Australian Accounting Standards not yet operative

The Trust cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of

Australian Accounting Standards and Other Pronouncements. Consequently, the Trust has not applied early any of the

following Australian Accounting Standards that have been issued that may impact the Trust. Where applicable, the

Trust plans to apply these Australian Accounting Standards from their application date.

Operative for reporting

periods beginning on/after

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Int 10 & 12] [Modified by AASB 2010-7]

1 Jul 2013

AASB 1053 Application of Tiers of Australian Accounting Standards

This Standard establishes a differential financial reporting framework consisting of two tiers of reporting requirements for preparing general purpose financial statements. There is no financial impact.

1 Jul 2013

AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced

Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Int 2, 4, 5, 15, 17, 127, 129 & 1052] This Standard makes amendments to Australian Accounting Standards and Interpretations to introduce reduced disclosure requirements for certain types of entities. There is no financial impact.

1 Jul 2013

AASB 9 Financial Instruments

1 Jan 2013 This Standard supersedes AASB 139 Financial Instruments: Recognition and

Measurement, introducing a number of changes to accounting treatments. The Standard was reissued in December 2010. The Trust has not yet determined the application or the potential impact of the Standard.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9

(December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 and 1038 and Interpretations 2, 5, 10, 12, 19 and 127]

1 Jan 2013

This Standard makes consequential amendments to other Australian Accounting Standards and Interpretations as a result of issuing AASB 9 in December 2010. The Trust has not yet determined the application or the potential impact of the Standard.

AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure

Requirements This Standard gives effect to Australian Accounting Standards – Reduced Disclosure Requirements for AASB 119 (September 2011). There is no financial impact.

1 Jan 2013

AASB 13 Fair Value Measurement

This Standard defines fair value, sets out a framework for measuring fair value and requires disclosures about fair value measurements. There is no financial impact.

1 Jan 2013

Changes in accounting estimates

There were no changes in accounting estimates that will have an effect on the current reporting period.



Note 4. Supplies and Services

2012 2011

$ $

Consultants and Contractors 21,203 17,660

Consumables 19,199 24,653

40,402 42,313

The 2011 figures have been restated. The 1 July 2010 balance was not affected by the error. The $15,000 error was due to an

accrual for outstanding project expenses (grants) that were conditional. The grant conditions were not met and the grant was not

payable, requiring a reversal of the accrual against equity in 2011.

Note 5. Employee Expenses

2012 2011

$ $

Salary and Wages

52,565 26,093

Superannuation – defined benefit plans

4,533 2,302

Long Service Leave

1,612 814

58,710 29,209

Corporate Services provided on recoup to the Department of Education

and the Department of Education Services.

Note 6. Accommodation Expenses

2012 2011

$ $

Lease Rentals

- 2,516

- 2,516

Corporate Services provided on recoup to the Department of Education

and the Department of Education Services.



Note 7. Net Loss on Fair Value Adjustment of Investment Property

2012 2011

$ $

Net Loss on Fair Value Adjustment of Investment Property 650,000 -

650,000 -

Note 8. Other Expenses

2012 2011

$ $

Revaluation Expenses 153 145

153 145

Note 9. Interest Revenue

2012 2011

$ $

Interest earned from Treasury 570,413 578,456

570,413 578,456

Note 10. Net Gain on Fair Value Adjustment of Investment Property

2012 2011

$ $

Net Gain on Fair Value Adjustment of Investment Property - 394,095

- 394,095



Note 11. Income from State Government

2012 2011

$ $

Resources received free of charge

Determined on the basis of the following estimates provided by agencies;

Department of Education 8,389 6,664

Department of Education Services 1,822 -

10,211 6,664

Assets or services received free of charge or for nominal cost are recognised as revenue at fair value of the assets and/or services that can be reliably measured and which would have been purchased if they were not donated. Contributions of assets or services in the nature of contributions by owners are recognised direct to equity.

Note 12. Receivables

2012 2011

$ $

Current

Accrued Revenue 129,678 146,956

Total current 129,678 146,956

The Trust does not hold any collateral as security or other credit enhancements relating to receivables.

Note 13. Other Current Assets

2012 2011

$ $

Current

GST Receivable 3,684 6,985




Note 14. Investment Property

2012 2011

$ $

Land

Land at fair value (a)

7,950,000 8,600,000

7.950,000 8,600,000

Reconciliations of the carrying amount of the investment property at the beginning and end of the reporting period is set out in the table below.

Land

2012 $

Carrying amount at start of year 8,600,000

Additions -

Net gain/(loss) from fair value adjustment (b)

(650,000)

Disposals -

Depreciation -

Carrying amount at end of year $7,950,000

2011

Carrying amount at start of year 8,205,905

Additions

Net gain from fair value adjustment (b)

394,095

Depreciation -

Carrying amount at end of year 8,600,000

(a) Freehold land was re-valued as at 1 July 2011 by the Western Australian Land Information Authority (Valuation

Services). The valuations were performed during the year ended 30 June 2012 and recognised at 30 June 2012. The fair value of all land has been determined by reference to recent market transactions. (b) Recognised in the Statement of Comprehensive Income.

Note 15. Impairment of Assets

There were no indications of impairment to property, plant and equipment at 30 June 2012.

The Trust held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period there were no intangible assets not yet available for use.

All surplus assets at 30 June 2012 have either been classified as assets held for sale or written-off.



Note 16. Payables

2012 2011

$ $

Current

Accrued Expenses 21,398 20,333

Accrued Salaries - 260



accrual for outstanding project expenses (grants) that were conditional. The grant conditions were not met and the grant was

not payable, requiring a reversal of the accrual against equity in 2011.

Note 17. Equity

Equity represents the residual interest in the net assets of the Trust. The Government holds the equity interest in the Trust on behalf of the community. The asset revaluation surplus represents that portion of equity resulting from the revaluation of non-current assets.

Contributed equity 2012 2011

$ $

Balance at start of period 5,388,902 5,388,902

Balance at end of period 5,388,902 5,388,902

Reserves

2012 2011

$ $

Asset revaluation surplus

Balance at start of year 5,724,500 5,724,500

Net revaluation increments/(decrements):

Land - -

Balance at end of year 5,724,500 5,724,500

Accumulated Surplus/(deficit) 2012 2011

$ $

Balance at start of year 9,286,288 8,381,256

Result for the period (168,641) 905,032

Balance at end of year 9,117,647 9,286,288


accrual for outstanding project expenses (grants) that were conditional. The grant conditions were not met and the grant was not

payable, requiring a reversal of the accrual against equity in 2011.



Note 18. Notes to the Statement of Cash Flows

Reconciliation of cash

Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

2012 2011

$ $

Cash and cash equivalents 12,169,085 11,666,342

12,169,085 11,666,342

Reconciliation of Net Cost of Services to net cash flows provided by/(used in) operating activities

2012 2011

$ $

Net Cost of Services (178,852) 883,604

Non-cash items:

Net (gain)/loss on fair value adjustment to property, plant and equipment 650,000 (394,095)


(Increase)/decrease in assets:

Current Receivables(c)

17,278 (20,044)

Increase/(decrease) in liabilities:

Current Payables(a)

2,945 (16,149)

Project Expenses - (11,500)

Net GST Receipts/(payments)(b)

1,429 1,629

Change in GST in Receivables/Payables(c)

(268) (1,817)

Net cash provided by/(used in) operating activities 502,743 448,058

(a) Note that the Australian Taxation Office (ATO) receivable/payable in respect of GST and the receivable/payable in

respect of the sale/purchase of non-current assets are not included in these items as they do not form part of the reconciling items.

(b) This is the net GST paid/received, i.e. cash transactions.

(c) This reverses out the GST in receivables and payables.



Note 19. Contingent Liabilities and Contingent Assets

Contingent Liabilities

In addition to the liabilities included in the financial statements, there are the following contingent liabilities:

Contaminated Sites

Under the Contaminated Sites Act 2003, the Public Education Endowment Trust is required to report known

and suspected contaminated sites to the Department of Environment and Conservation (DEC). In accordance with the Act, DEC classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as contaminated – remediation required or possibly contaminated – investigation required, the Trust may have a liability in respect of investigation or remediation

expenses.

In 2007 DEC classified the Trust's Fremantle site as contaminated - remediation required. However the long term user (the polluter) of the site is appealing the classification and the Trust is unable to assess the likely outcome of the classification appeal and accordingly it is not practicable to estimate the potential financial effect or to identify the uncertainties relating to the amount or timing of outflows.

Contingent Assets

There were no contingent assets for the period ending 30 June 2012.

Note 20. Events Occurring After the End of the Reporting Period

There are no events occurring after 30 June 2012, which would materially impact these financial statements.



Note 21. Explanatory statement

Significant variations between estimates and actual results for income and expense as presented in the financial statement titled ‘Summary of Consolidated Account Appropriations and Income Estimates’ are shown below: Significant variations are considered to be those greater than 10% or $5000.

Significant variances between estimate and actual for the financial year

2012 2012

Estimate Actual Variance

$ $ $

Income

Interest Revenue 503,044 570,413 67,369

Net Gain on Fair Value Adjustment of Investment Property 183,000 - (183,000)

Expenses

Project Expenses 500,000 - 500,000

Employee Expenses 80,765 58,710 22,055

Supplies and Services 43,014 40,402 2,612

Accommodation Expenses 3,000 - 3,000

Net Loss on Fair Value Adjustment of Investment Property - 650,000 (650,000)

Interest Revenue

The variance is due to the fact that at the time of preparing the estimates, the increase in interest rate was not expected and therefore not taken into consideration.

Net Gain on Fair Value Adjustment of Investment Property The variation is due to an expected increase in valuation of the Fremantle land at the time of preparing the estimate. See Net Loss on Fair Value Adjustment of Investment Property note below.

Project Expenses The variance is due to the fact that at the time of preparing the estimates an allocation was made for projects, however no projects were approved in the 2012 financial year.

Supplies and Services

The variance is due to the fact that at the time of preparing the estimates, additional expenses for grants administration were estimated.

Employee Expenses The variance is due to the fact that at the time of preparing the estimates, the Trust did not expect the position to be vacant for a period of time.

Accommodation Expenses The variance is due to lower than expected costs for accommodation expenses.

Net Loss on Fair Value Adjustment of Investment Property

The variation is due to a decrease in valuation of the Fremantle land which was not expected at the time of preparing the estimate. See Net Gain on Fair Value Adjustment of Investment Property note above.



Significant variances between actual results for current year and prior year

2012 2011 Variance

$ $ $

Income

Interest Revenue 570,413 578,456 (8,043)

Net Gain on Fair Value Adjustment of Investment Property - 394,095 (394,095)

Expense

Supplies and Services 40,402 42,313 1,911

Employee Expenses 58,710 29,209 (29,501)

Accommodation Expenses - 2,516 2,516

Net Loss on Fair Value Adjustment of Investment Property 650,000 - (650,000)

Interest

The variance is due to a decrease in investment interest rates in 2011-12 provided by the Department of Treasury.

Net Gain on Fair Value Adjustment of Investment Property The variation is due to a net loss, rather than a net gain in the revaluation of the Fremantle land. (See Net Loss on Fair Value Adjustment of Investment Property note below).

Supplies and Services The variance is due to a decrease in expenses for marketing and promoting of the new grant program, resulting in a reduction in grant administration expenses.

Employee Expenses

The variance is due to the Executive Officer position being vacant for a period of time in 2011.

Accommodation Expenses The variance is due to a decrease in accommodation expenses.

Net Loss on Fair Value Adjustment of Investment Property

The variance is due to there being a Net Loss for Fair Value Adjustment of the Trust land. (See Net Gain on Fair Value Adjustment of Investment Property note above).



Note 22. Financial Instruments (a) Financial Risk Management Objectives and Policies

Financial instruments held by the Trust are cash and cash equivalents and cash equivalents, receivables, and payables. The Trust has limited exposure to financial risks. The Trust’s overall risk management program focuses on managing the risks identified below.

Credit risk

Credit risk arises when there is the possibility of the Trust’s receivables defaulting on their contractual obligations resulting in financial loss to the Trust. The maximum exposure to credit risk at end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any provisions for impairment as shown in the table at note 21(c) ‘Financial instruments disclosures’ and note 11 ‘Receivables’. The Trust has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Trust’s exposure to bad debts is minimal. At the end of the reporting period there were no significant concentrations of credit risk.

Liquidity risk

Liquidity risk arises when the Trust is unable to meet its financial obligations as they fall due. The Trust is exposed to liquidity risk through its trading in the normal course of business.

The Trust is exposed to liquidity risk through its trading in the normal course of business.

The Trust has appropriate procedures to manage cash flows by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Trust’s income or the value of its holdings of financial instruments. The Trust does not trade in foreign currency and is not materially exposed to other price risks. The Trust’s exposure to market risk for changes in interest rates relates primarily to the long-term debt obligations.

(b) Categories of Financial Instruments

In addition to cash and bank overdraft, the carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are as follows:

2012 2011

$ $

Financial Assets


Loans and receivables(a)

129,678 146,956

Financial Liabilities

Financial liabilities measured at amortised cost 21,398 20,593

(a) The amount of loans and receivables excludes GST recoverable from the ATO (statutory receivable).



(c) Financial Instrument Disclosures

Credit risk

The following table details the Trust’s maximum exposure to credit risk and the ageing analysis of financial assets. The Trust’s maximum exposure to credit risk at the end

of the reporting period is the carrying amount of financial assets as shown below. The table discloses the ageing of financial assets that are past due but not impaired and

impaired financial assets. The table is based on information provided to senior management of the Trust.

The Trust does not hold any collateral as security or other credit enhancement relating to the financial assets it holds.

Aged analysis of financial assets

Past due but not impaired

Carrying

Amount

Not past

due and not

impaired

Up to 1

month 1-3 months

3 months to

1 year 1-5 years

More than 5

years

Impaired

financial

assets

$ $ $ $ $ $ $ $

2012


Restricted cash and cash equivalents

Receivables(a)

129,678 129,678

Loans and advances

Amounts receivable for services

12,298,763 12,169,085 129,678

2011



Receivables(a)

146,956 146,956

Loans and advances


11,813,298 11,666,342 146,956

(a) The amount of receivables excludes the GST recoverable from the ATO (statutory receivable).



Liquidity risk and interest rate exposure

The following table details the Trust’s interest rate exposure and the contractual maturity analysis of financial assets and financial liabilities. The maturity analysis section includes

interest and principal cash flows. The interest rate exposure section analyses only the carrying amounts of each item.

Interest rate exposure and maturity analysis of financial assets and financial liabilities

Interest rate exposure Maturity dates

Weighted

Average

Effective

Interest Rate

Carrying

Amount

Fixed

interest

rate

Variable

interest rate

Non-interest

bearing

Nominal

Amount

Up to 1

month

1-3

months

3 months

to 1 year

1-5

years

More than

5 years

% $ $ $ $ $ $ $ $ $ $

2012

Financial Assets

Cash and cash equivalents 4.745 12,169,085 12,169,085 12,169,085 12,169,085


Receivables(a)

129,678 129,678 129,678 129,678

Loans and advances


12,298,763 12,169,085 129,678 12,298,763 12,298,763


Payables 21,398 21,398 21,398 21,398

Other borrowings

Finance lease liabilities

Amounts due to the Treasurer

21,398 21,398 21,398 21,398




Interest rate exposure and maturity analysis of financial assets and financial liabilities

Interest rate exposure Maturity dates

Weighted

Average

Effective

Interest Rate

Carrying

Amount

Fixed

interest

rate

Variable

interest rate

Non-interest

bearing

Nominal

Amount

Up to 1

month

1-3

months

3 months

to 1 year

1-5

years

More than

5 years

% $ $ $ $ $ $ $ $ $ $

2011

Financial Assets

Cash and cash equivalents 5.046 11,666,342 11,666,342 11,666,342 11,666,342


Receivables(a)

146,956 146,956 146,956 146,956

Loans and advances


11,813,298 11,666,342 146,956 11,813,298 11,813,298


Payables 20,593 20,593 20,593 20,593

Other borrowings

Finance lease liabilities

Amounts due to the Treasurer

20,593 20,593 20,593 20,593




Interest rate sensitivity analysis

The following table represents a summary of the interest rate sensitivity of the Trust’s financial assets and liabilities at the end of the reporting period on the surplus for the period and equity for a 1% change in interest rates. It is assumed that the change in interest rates is held constant throughout the reporting period.

-100 basis points +100 basis points

Carrying amount Surplus Equity Surplus Equity

2012 $ $ $ $ $

Financial Assets

Restricted cash and cash equivalents 12,169,085 (121,691) (121,691) 121,691 121,691

Total Increase/(Decrease) (121,691) (121,691) 121,691 121,691

-100 basis points +100 basis points

Carrying amount Surplus Equity Surplus Equity

2011 $ $ $ $ $

Financial Assets

Cash and cash equivalents 11,666,342 (116,663) (116,663) 116,663 116,663

Total Increase/(Decrease) (116,663) (116,663) 116,663 116,663

Fair values

All financial assets and liabilities recognised in the Statement of Financial Position, whether they are carried at cost or fair value, are recognised at amounts that represent a reasonable approximation of fair value unless otherwise stated in the applicable notes.

Note 23. Remuneration of Members of the Accountable Authority and Senior Officers

Remuneration of Members of the Accountable Authority

One of the members of the Trust received remuneration in this financial year.

2012 2011

$

0 – 10,000 1 1

1 1

$ $

The total remuneration of members of the accountable authority 417 531



Note 24. Remuneration of Auditor

Remuneration paid or payable to the Auditor General in respect of the audit for the current financial year is as follows:

2012 2011

$ $

Auditing the accounts, financial statements and performance indicators 16,500 15,500

16,500 15,500

Note 25. Supplementary Financial Information

(a) Write-offs

During the financial year, nil ($2011: nil) was written off the Trust’s asset register under the authority of:

2012 2011

$ $

The Accountable Officer - -

The Minister - -

Executive Council - -

- -

(b) Losses through theft, defaults and other causes

2012 2011

$ $

Losses of public moneys and public and other property through theft or default - -

Amounts recovered - -

- -

(c) Gifts of Public Property

2012 2011

$ $

Gifts of public property provided by the Trust - -

- -



Key Performance Indicators

Certification of Key Performance Indicators

We hereby certify that the performance indicators are based on proper records, are relevant and

appropriate for assisting users to assess the Public Education Endowment Trust’s performance,

and fairly represent the performance of the Trust for the financial year ended 30 June 2012.

Professor Lesley Parker AM Professor Keith Punch

Chairperson Trustee


17 September 2012



Key Performance Indicators

Government Goal - Outcomes Based Service Delivery: Greater focus on achieving results in key

service delivery areas for the benefit of all Western Australians.

Desired Outcome - Enhancement of the public education of Western Australian students.

The Trust has the following set of key performance indicators to assist in the measurement of the

efficiency and effectiveness with which the Trust pursues its organisational outcome. These

indicators report against the Outcome Based Management structure for the Trust and have been

developed by the Trustees in conjunction with the Minister for Education and the Department of

Treasury.

Effectiveness Indicators

The effectiveness indicators measure the achievement of the Trust in meeting the needs of

Western Australian students by providing grants for educational initiatives.

KPI 1 – Annual Grant Feedback Survey

The grant feedback survey is designed to be administered annually to measure the extent to

which grant funded projects achieve their objectives in terms of educational benefits to Western

Australian students. The survey is designed to measure the perceptions of external stakeholders

including the grant program manager, school principals and relevant Regional Offices. The

survey will measure whether external stakeholders perceive the funded projects to have been

either: a) very effective; b) effective; c) ineffective or d) very ineffective.

The target for this Key Performance Indicator is for the Trust to achieve survey results that show

that at least 80% of external stakeholders perceive the funded projects that affect them are either

Very Effective or Effective.

As funded projects often span a period of two or three years, this indicator is not restricted to

completed projects. The external stakeholders of all projects that are ongoing and those that

have received grants within the accounting period will be included in the survey.

No grants were administered in the 2010-2011 or 2011-2012 periods. Therefore, no survey of

stakeholders has been undertaken during these periods.



KPI 2 – Consideration of Grant Applications

Considering grant applications forms a major part of the Trust’s core business. The target for this

Key Performance Indicator is for the Trust to consider 100% of applications for grants to benefit

the public education of Western Australian students.

Nineteen grant applications were received in the 2011-2012 period. The applications were

considered at a meeting of the Trustees held on 5 May 2012.

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

2010/2011 2011/2012

Number of grant applications received Number of grant applications considered

100% of grant

applications considered

100% of grant

applications considered



Efficiency Indicator

This efficiency indicator measures the efficiency with which the Trust delivers its core service:

providing grants for public education purposes, for projects that will benefit the education of

Western Australian students.

KPI 3 – Grants Operations Expenses per $ of Grants Provided to Eligible Organisations

This efficiency indicator is calculated by dividing the cost of service, as reported in the Income

Statement, less the grants paid, less land expenses, by the value of the grants provided.

This measure shows the extent to which the Trust has maximised grant funding to eligible

organisations while containing its operations expenditure related to distributing grants.

The number of grants provided in each year is highly variable. No grants were provided in 2010-

2011 or 2011-2012 periods. Therefore, no efficiency indicator calculation is possible within this

period.

History Graph/Table

Ministerial Directives

No Ministerial Directives were received during the Reporting period.

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2011/12 2010/11 2009/10 2008/09

Grant operation expenses per $ of grants to eligible organisations



Other Financial Disclosures

Employment and Industrial Relations

Staff Profile 2012 2011

Full-time permanent 1 1



Governance Disclosures

Contracts with Senior Officers

At the date of reporting, other than normal contracts of employment of service, no Trustees or

Senior Officers, or firms of which Senior Officers or Trustees are members, or entities in which

Senior Officers or Trustees have substantial interests, had any interests in existing or proposed

contracts with the Public Education Endowment Trust, Trustees and Senior Officers.

Compliance with Public Sector Management Act Section 31 (1)

1 In the administration of the Public Education Endowment Trust, I have complied with the

Public Sector Standards in Human Resource Management, the Western Australian Public

Sector Code of Ethics and our Code of Conduct.

2 I have put in place procedures designed to ensure such compliance and conducted

appropriate internal assessments to satisfy myself that the statement made in 1 is correct.

3 The applications made for breach of standards review and the corresponding outcomes for

the reporting period are:

Number lodged: nil

Number of breaches found (including details of

multiple breaches per application): nil

Number still under review: nil

Professor Lesley Parker AM

Chairperson

Public Education Endowment Trust

17 September 2012



Other Legal Requirements

Advertising

ELECTORAL ACT 1907 (WA) Section 175ZE requirements

In compliance with section 175ZE of the Electoral Act 1907, the Trust reports that there was no

expenditure in relation to advertising, market research, polling, direct mail and media advertising

in the 2011-12 reporting period.



Annual Estimates

Estimate of Statement of Comprehensive Income


Note 2013 2012

Estimate Actual

$ $

COST OF SERVICES

Expenses

Project Expenses 500,000 -

Supplies and Services 48,000 40,402

Employee Expenses 96,000 58,710

Net Loss on Fair Value Adjustment of Investment Property 1 - 650,000

Other Expenses 3,000 153

Total Cost of Services 647,000 749,265

Income

Revenue

Interest Revenue 450,000 570,413

Net Gain on Fair Value Adjustment of Investment Property - -

Total Revenue 450,000 570,413

NET COST OF SERVICES (197,000) (178,852)

Income from State Government


Total Income from State Government 11,000 10,211

SURPLUS/(DEFICIT) FOR THE PERIOD (186,000) (168,641)

Other Comprehensive Income - -

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (186,000) (168,641)



Estimate of Statement of Financial Position


Note 2013 2012

Estimate Actual

$ $

ASSETS

Current Assets

Cash and Cash Equivalents 11,988,000 12,169,085

Receivables 2 111,000 129,678

Other Current Assets 2 29,000 3,684

Total Current Assets 12,128,000 12,302,447

Non-Current Assets

Investment Property 4 7,950,000 7,950,000

Total Non-Current Assets 7,950,000 7,950,000

TOTAL ASSETS 20,078,000 20,252,447

LIABILITIES

Current Liabilities

Payables 3 28,000 21,398

Total Current Liabilities 28,000 21,398

TOTAL LIABILITIES 28,000 21,398

NET ASSETS 20,050,000 20,231,049

EQUITY

Contributed Equity 5,388,902 5,388,902

Reserves 5,725,000 5,724,500

Accumulated Surplus 8,936,098 9,117,647

TOTAL EQUITY 20,050,000 20,231,049



Notes to the Annual Estimates


Note 1 Net Loss on Fair Value Adjustment of Investment Property

2013 2012

Estimate Actual

$ $

Net Loss of Fair Value Adjustment of Investment Property - 650,000

- 650,000

Note 2 Other Current Assets

Income earned but not received at balance date is detailed as follows 2013 2012

Estimate Actual

$ $

Interest due from Treasury based on Commonwealth Bank Account balance 111,000 129,678

GST Receivable 29,000 3,684

140,000 133,362

Note 3 Payables 2013 2012

Expenditure accrued but not paid at balance date Estimate Actual

$ $

Accrued Expenses 28,000 21,398

28,000 21,398

Note 4 Investment Property

Investment property, principally comprising freehold land, is held for long term rental yields and is not occupied by the Trust. Investment property is carried at fair value, as mandated by TI 954, representing open market value determined annually by an external valuer. Changes in fair value are recorded in the Statement of Comprehensive Income as part of other income or other expense.

annual report 2011-2012 · 2019. 12. 6. · ms norma jeffery, trustee (until 21 november 2011) the...

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